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Informist, Monday, May 11, 2026

By Sunil Raghu

AHMEDABAD – Tata Power Ltd. is expected to see a year-on-year fall in its net profit during the March quarter owing to the closure of its 4,000-megawatt power plant at Mundra in Gujarat. The company's revenue is also expected to see a fall, despite capacity additions, primarily in the renewable energy segment, brokerages added. The government's decision to not extend a specific legal provision that ensured sustained operations of Tata Power's Mundra power plant beyond June 2025 had weighed on the company's net profit in the September and December quarters as well.

Tata Power's consolidated net profit for the March quarter is expected to fall over 20% on year to INR 8.32 billion, according to the average of estimates from seven brokerages. The bottom line is seen falling over 2% from the trailing quarter. Among the seven brokerages, Nuvama Wealth Management Ltd. has the highest estimate for Tata Power's consolidated net profit at INR 10.53 billion. Motilal Oswal Financial Services Ltd. has the lowest estimate of INR 6.48 billion.

Tata Power's consolidated revenue for the reporting quarter is seen falling 3.85% on year to over INR 164 billion. This would translate to an increase of 17.85% over the trailing quarter. Nuvama Wealth Management has the highest revenue estimate of nearly INR 186 billion. JM Financial in its note on expected March quarter earnings of Tata Power said it sees losses in production at the Mundra power plant being offset by rising contribution from the fully ramped-up solar cell and module business, commissioning of additional renewable assets, and sustained strong performance of the solar rooftop and Odisha distribution businesses. Elara Securities (India) Pvt. Ltd. has the lowest estimate for revenue at over INR 146 billion.

All brokerages see the continued closure of the Mundra plant as a key pressure point for Tata Power's financial performance in the March quarter too. Tata Power has five supercritical units of 800 MW each, at Mundra. The plant accounts for nearly one-fourth of Tata Power's total electricity generation capacity of 16 gigawatts. This plant accounted for INR 112.9 billion of the company's consolidated turnover of INR 645.02 billion in the previous financial year ended March 2025. As per the power purchase agreements, Tata Power supplies electricity from its Mundra plant to Gujarat, Rajasthan, Maharashtra, Haryana, and Punjab. These agreements are based on a fixed tariff and do not allow the company to pass on any increase in the cost of imported coal to buyers of the power it produces. It is only when the government imposes Section 11 of the Electricity Act, 2003, power producers can recover the actual fuel cost from electricity buyers.

In May 2022, the Ministry of Power had invoked this provision and directed all power plants in the country using imported coal, including Tata Power's Mundra plant, to operate at full capacity to meet the high demand for electricity. The provision allows the government to ask power producers to keep their plants running to prevent any outages in case of a shortage. The provision was extended several times in subsequent years. For Tata Power's Mundra plant, the last extension was till Jun. 30, 2025. With the provision ceasing to be in force since Jul. 1, 2025, Tata Power was forced to operate the plant at a loss, with curtailed margins for a while, but eventually operations were shut in September, 2025.

The company's consolidated earnings before interest, tax, depreciation, and amortisation for the December quarter were seen at nearly INR 33.60 billion, according to the average of six estimates. The lowest EBITDA estimate was nearly INR 29.68 billion by Prabhudas Lilladhar Pvt. Ltd. and the highest was nearly INR 37.42 billion by Kotak Securities Ltd. The company's consolidated EBITDA was INR 38.29 billion in the year-ago quarter. Tata Power will detail its March quarter results Tuesday.

Brokerages will monitor the company's performance in the distribution business, pace of commissioning of renewables capacity, and impact of signing of supplementary power purchase agreement for the Mundra plant. The company's management has in its statutory filing with the stock exchanges said that the Mundra power plant has become operational from Apr. 1.

Monday, shares of the company ended down 0.6% at INR 433.20 on the National Stock Exchange. The stock was up nearly 19% since the company detailed its earnings for the December quarter on Feb. 4.

Of the eight research reports on the company available with Informist, six have a 'buy' call on the stock, with an average target price of INR 465. This is 7% higher than the current stock price. Two brokerage have a 'hold' recommendation on the stock.

Following are the Jan-Mar earnings estimates for Tata Power from seven brokerages in descending order by the estimate of net profit, in INR billion:

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Edited by Akul Nishant Akhoury

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